Squiffs _ & Olivia Capozzalo
December 17, 2025

gm, Defiers!

Today’s big story:

While most HL supporters considered the HYPE in the protocol’s Assistance Fund already burned, Hyper Foundation is looking to make it official.

In other news:

Commissioner Peirce calls for financial privacy
Gnosis hard fork sparks debate
Uniform Labs launches RWA liquidity protocol
HumaTek is rebuilding trust in humanitarian aid with blockchain [SPONSORED]

Read more below! But first, please give our sponsors some love; they make this newsletter possible.

Stellar: The Proving Ground for Real-World Privacy The latest Stellar upgrade, X-Ray, delivers zero-knowledge cryptography that lets developers build privacy into their apps—protecting what matters while keeping Stellar radically open, trusted, and ready for real-world finance.

Ethereum has solved scale. It unlocked programmability.

Now it’s approaching the challenge that will define the next crypto cycle: privacy.

As institutions and everyday users move onchain, radical transparency is no longer enough. Payroll, treasury flows, vendor relationships, and financial strategies can’t live forever in public. Adoption has arrived, but retention depends on confidentiality that works in the real world.

A new privacy layer is forming across Ethereum, focused on selective disclosure, regulatory alignment, and practical use at scale. This isn’t about hiding activity, it’s about restoring balance between transparency and discretion.

In our latest article, we explore why privacy is becoming crypto’s next foundational layer, and how it will shape the cycle ahead.

📈 Markets in the Past 24 Hours

TICKER	VALUE	24H
Bitcoin	$85,916	-2.28 %
Ethereum	$2,825.26	-4.25 %
BNB	$840.69	-3.62 %
XRP	$1.86	-3.58 %
Solana	$122.58	-4.18 %

Today’s Big Story

Not a HYPE Burn Could Lift the Market Mood

DeFi’s 2025 darling, Hyperliquid, has struggled since 10/10 saw some of its market makers wiped out, and its main product - altcoin trading - experience a harsh drop in demand; but the Hyper Foundation appears to be on a mission to turn sentiment around and is now proposing a burn of the Hyperliquid Assistance Fund (AF).

HYPE bulls are celebrating the move, while onlookers question if this negatively affects Hyperliquid’s ability to support its protocol in a time of crisis, and why anyone considered the AF to be anything other than a pseudo-burn address in the first place.

The HYPE price action post announcement sums its importance up the best, as despite its multi-month downtrend, HYPE shot up from $26.5 to $28, before making a new local low today of $24.5. In short, it's a nonevent, and the market had priced the AF as burned supply to begin with.

HYPE Chart - CoinGecko

Rising Competition

Uncertainty surrounding the exchange is also magnified by the rise of competitors with fresh new incentives, primarily Lighter, which is set to host its token generation event in the near future.

Lighter's zero fee model is fantastic for high frequency traders, market makers and (most importantly?) farmers, but the DEX’s repeated downtime during extremist events such as the 10/10 liquidations go to show that Hyperliquid’s infrastructure, at least for the moment, is by far the most battle-tested product on the market.

Price Action

Despite the product’s reliability, token price action has placed a magnifying glass on the ecosystem, with critics, as well as token holders who are down 50+%, ready to pounce on any move the team makes.

It's more than likely that the only reason people are worried about permanently locking the AF supply is because the price is down and therefore uncertainty is rising by default. If the token was at all-time highs, the move would be almost unanimously celebrated.

A lack of an insurance plan for such a large exchange can be concerning, but luckily for Hyperliquid bulls the DEX remains one of the most profitable entities per employee in the entire world, and the team certainly isn’t short on cash.

While being put to the test by competitors and a cyclical user base is an inevitability in a crypto products life cycle, Hyperliquid still sits on its own highly anticipated incentives. The protocol has another 30% of its token supply, worth more than $8 billion at current prices, set to be distributed however they please. Is there a secret points season going on currently? No one knows for certain, and the team has a reputation for keeping information under wraps.

But as the HYPE price goes down, uncertainty increases, leading to intense debates over what is likely a nonevent, such as the AF officially burning its tokens.

Squiffs, resident degen at The Defiant

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🎬WATCH

Becoming the ‘Institutions Chain’ with Avalanche’s Morgan Krupetsky

In this episode of The Defiant podcast, we speak with Morgan Krupetsky, VP of OnChain Finance at Ava Labs, to break down one of the most significant shifts happening in crypto today: the rapid institutionalization of blockchain and Avalanche’s strategy to lead it.

Morgan walks us through Avalanche’s “real-world adoption first” ethos, explaining how its unique architecture enables enterprises, fintechs, banks, governments, and consumer apps to build purpose-designed blockchains while tapping into a shared liquidity hub.

Top News in the Past 24 Hours

SEC Commissioner Peirce, Crypto Experts Say Privacy Is Key to Crypto Adoption The recent SEC Crypto Task Force roundtable discussed the rising demand for privacy tools and the need for compliant solutions as crypto adoption grows. Why it matters: Privacy has emerged as a key focus in the industry in recent months, reflected in the privacy sector’s rally.
Gnosis Hard Fork to Recover Balancer Funds Sparks Debate on Immutability In a governance forum post on Dec. 12, Philippe Schommers, Gnosis’ head of infrastructure, said the network would need to undergo a hard fork to return funds frozen during the recent exploit of DeFi protocol Balancer. Why it matters: The move has split the Gnosis community over who gets to decide when or if a blockchain’s immutability can be broken.
Uniform Labs Launches Multiliquid to Unlock Liquidity for Tokenized RWAs A blockchain infra company founded by former team members of Standard Chartered and UniCredit announced the launch of Multiliquid, a protocol designed to provide instant liquidity for tokenized assets.Why it matters: Tokenized RWAs can be difficult to cash out quickly because redemptions depend on the issuer.